Bank of Italy Calls Bitcoin P2P Crime-as-a-Service in Latest Report
A recent Bank of Italy (Banca d'Italia) publication classifies Bitcoin P2P as "Crime-as-a-Service," criticizing its anonymous feature.In its latest Economic and Financial Research report, the Bank of Italy has raised concerns about Bitcoin's peer-to-peer (P2P) systems, labeling them as potential "crime-as-a-service" platforms. The central bank's report highlighted the pseudonymous nature of Bitcoin transactions, which they noted could help facilitate illicit activities like money laundering.However, according to the report, Bitcoin's P2P services are not inherently criminal. Nonetheless, the authors believe its privacy features present an opportunity for individuals seeking to obscure illegal financial activities to exploit it.The Bank of Italy pointed out that in regions with weak anti-money laundering (AML) regulations, such as certain countries identified by the Financial Action Task Force (FATF) as high-risk, these platforms are particularly susceptible to misuse. The report also noted that the decentralized finance (DeFi) sector poses additional challenges for regulatory oversight. Without intermediaries to enforce AML compliance, DeFi platforms can potentially be exploited for illicit purposes. According to the report, the absence of centralized control in DeFi makes it difficult to implement traditional regulatory measures, necessitating new approaches to ensure compliance and prevent misuse.Broader Concerns around Bitcoin's Anonymity The central bank's perspective aligns with previous criticisms from various global authorities. For instance, the Financial Action Task Force expressed concerns about the anonymity provided by cryptocurrencies, suggesting they could be used to facilitate money laundering and terrorist financing. Similarly, in 2022, the European Central Bank warned about the potential for cryptocurrencies to be used in illegal activities due to their pseudonymous nature. In addition, JP Morgan CEO Jamie Dimon has maintained that Bitcoin serves no real purpose except its use for criminal activities.Is Bitcoin the Primary Choice for Criminals?However, proponents of Bitcoin argue that the technology itself is neutral and that its benefits extend beyond the potential for misuse. Further, data confirms that cash remains the primary medium for financial criminal activities like money laundering.Notably, the 2024 Crypto Crime Report from Chainalysis confirmed that illicit addresses received $24.2 billion in crypto transactions in 2023. This figure represented only 0.34% of the entire on-chain transaction volume in 2023. Meanwhile, a report from the OCCRP revealed that criminal transaction volume amounted to $3 trillion last year, with most of these in cash. Also, estimates suggest criminals launder about $800 billion to $2 trillion every year, and cash accounts for most of this.Bitcoin bull and MicroStrategy Chairman Michael Saylor stressed in May 2021 that besides blockchain, criminals also leverage other mediums to perpetrate crimes, including cash, cars, computers and guns. He questioned if this reality would warrant a ban on these items.https://twitter.com/saylor/status/1397552685306494979Moreover, advancements in blockchain analytics have made it increasingly possible to trace Bitcoin transactions, thereby mitigating concerns about its use in illicit activities.
Text source: The Crypto Basic
